The United States is on the cusp of quadrupling its ammonia production capacity in the next five years—a move that could come with serious risks to human health and the environment. Ammonia, a chemical that is usually manufactured from natural gas, is used for synthetic fertilizers and explosives. Proponents now want to use it as a shipping fuel and to make hydrogen for clean energy.

But the future of these new ammonia projects is highly uncertain. The incoming Trump Administration has threatened to roll back implementation of legislation that provides public funding for the industry (the Inflation Reduction Act) and impose tariffs on countries that are expected to import U.S. ammonia, which could inspire retaliatory tariffs and inhibit international trade.  

Ammonia is produced by combining hydrogen with nitrogen from the air. It has traditionally been used in fertilizers, but it can also be used as a fuel in the shipping industry and as a feedstock in manufacturing explosives, plastics, synthetic fibers and resins, and other chemicals.  

Because it contains three hydrogen atoms in every molecule, ammonia has been gaining increasing attention for its potential use in the transportation and production of hydrogen fuel. Hydrogen does not release greenhouse gases when burned, making it a potentially climate-friendly fuel to decarbonize hard to abate sectors like steel and cement manufacturing. But, as the smallest molecule in the universe, hydrogen is especially prone to leakage, making it difficult to store and transport. These challenges have drawn attention to ammonia as a potential solution, because ammonia can be shipped more easily and then broken down into hydrogen.

But traditional ammonia production from fossil fuels is extremely emissions intensive. Ammonia made from natural gas (sometimes called “gray” ammonia) consumes 33,000 cubic feet for every ton of ammonia produced, or roughly the amount of natural gas needed to power a typical American household for one year. To purportedly reduce the carbon footprint, the majority of proposed ammonia projects have announced ambitious plans to capture and sequester at least some carbon dioxide from the production process, producing what is referred to as “blue” ammonia. A smaller number of projects plan to use renewable electricity, water, and atmospheric nitrogen to produce “green” ammonia, which does not rely on fossil fuels.

According to public records compiled on the Oil & Gas Watch database as of December 2024, 38 proposed ammonia projects across the U.S. could increase annual ammonia production capacity by over 60 million metric tons per year by 2030. That would result in a near quadrupling of the amount of ammonia production capacity in the U.S. today, from 21 million metric tons to 81 million metric tons. For a fact sheet on the proposed growth of the industry, click here.

About two thirds of these projects plan to make ammonia from fossil fuels with carbon capture, a largely unproven technology that has not shown itself to be financially viable. These projects account for nearly 70-90 percent of proposed capacity additions announced to date. Only eight projects plan to make ammonia without fossil fuels, representing just 7 percent of the proposed capacity.

Most of the additional ammonia is expected to be exported to meet growing international demand for low-carbon hydrogen and ammonia. The European Union plans to import 10 million metric tons of “green” hydrogen by 2030 and meet around 10 percent of its energy needs with the fuel by 2050. Japan has a national strategy to use ammonia in power plants as well as in glass and steel manufacturing, and South Korea hopes to increase the share of hydrogen and ammonia-generated electricity in its power mix to over 7 percent by 2036.

The ammonia buildout in the U.S. has been propelled by more than $100 billion in taxpayer subsidies for hydrogen production in the 2022 Inflation Reduction Act, as well as supercharged tax credits for carbon capture, use, and sequestration technologies.  

But President-elect Trump has vowed to claw back the Biden Administration’s hallmark climate policy, referring to it as the “Green New Scam” on the campaign trail. Trump’s promises have been echoed by his conservative allies at the Project 2025 Presidential Transition Project, which have also called for the repeal of all taxpayer subsidies for carbon capture.

Experts agree that if the incoming administration eliminates the Biden-era subsidies, most of these proposed projects would not move forward. But completely eliminating federal support for “clean” energy projects – especially those relying on carbon capture – is unlikely because of strong support from the fossil fuel industry and senators from Republican states, which are set to profit the most from these investments if proposed projects come to fruition.  

“One thing I’m worried about from the new administration is keeping these tax credits for carbon capture and hydrogen production in place, but weakening some of the environmental requirements,” said Dan Esposito with the think tank Energy Innovation.  

That may include repealing the recently enacted methane leak penalty on oil and gas producers that the Biden EPA estimates would reduce methane emissions by 1.2 million metric tons through 2035.  

A weakening of environmental regulations along the oil and gas supply chain won’t just be bad for the climate, it may also prevent American producers from selling their products in key markets in Europe and Asia.  

“The European Commission has proposed rules around what qualifies as low-carbon hydrogen, and that definition gets extended to ammonia by proxy,” Esposito explained. Companies producing hydrogen and ammonia in the U.S. will need to “meet Europe’s definition of clean,” which means hydrogen made from renewable energy with at least a 70 percent reduction in greenhouse gas emissions. These rules effectively require producers in the U.S. to control for methane leaks throughout their supply chain if they want to sell in Europe. Japan announced similar carbon intensity criteria last year.  

While the potential rollback of Biden-era tax credits and climate policies by the incoming Trump administration threatens planned projects, ammonia and hydrogen made from natural gas are not really climate-friendly, because of the significant greenhouse gas emissions associated with the production process. And the cancellation of ammonia production projects could be good news for the local communities – largely along the Texas and Louisiana Gulf Coast – where much of prospective buildout is concentrated.  

Ammonia is toxic to humans and wildlife. It can irritate the skin, eyes, and lungs, and has been attributed to asthma and respiratory failure when inhaled. Not only does conventional ammonia manufacturing using natural gas methane release an enormous amount of climate-warming pollution (between 1.2 and 2.1 tons of greenhouse gases per ton of ammonia produced) it also releases nitrogen pollution into the air and water. Research by the Environmental Integrity Project found that fertilizer plants piped an estimated 7.7 million pounds of nitrogen pollution – including 3.9 million pounds of toxic ammonia – into U.S. waterways in 2021 alone.  

Because the vast majority of proposed ammonia capacity additions are expected to come from ammonia made from natural gas, that could also impact gas prices for American households and businesses. If all 38 proposed ammonia projects are built, they could consume nearly 2 trillion cubic feet of natural gas each year, an amount equal to about 5 percent of total U.S. natural gas production in 2023. Without gas production increases, the demand from new ammonia plants could create more competition for natural gas with homes, businesses, and other industries and potentially raise consumer prices.

Lead photo: A view of the company premises of ammonia manufacturer Yara Brunsb'ttel GmbH in Schleswig-Holstein, Germany. Photo by: Marcus Brandt/picture-alliance/dpa/AP Images